The Energy Information Administration today released monthly production data showing that November 2016 US production had increased to 10.038 million barrels a day (b/d) surpassing Saudi Arabia production in November of 9.97 million b/d.
US crude production in November is near an all-time record high of 10.40 million b/d in 1970.
In addition, EIA also released today its weekly crude inventory data showing a crude build of 7 million barrels last week while gasoline stocks and distillate fuel oil stocks declined by 2 million barrels and 1.9 million barrels respectively. Click here for the EIA weekly inventory data.
On January 21 we wrote a client note regarding Saudi Energy Minister al-Falih’s comments about continuing OPEC and non-OPEC production “cooperation beyond 2018” as “not surprising and especially now” with “monthly US crude production near or at 10 million b/d and on its way to surpass Saudi production in 2018.” Today’s EIA production data confirms we are well past this point.
We expect to see this rising US production narrative dominate the discussion at least through 1H 2018 and weigh on prices.
